Buying Home Insurance? Make Sure Your Valuables Are Covered
Not all homeowners policies are the same. Understanding the limitations can help you find coverage that protects your valuable assets
Quick take: Does homeowners insurance cover my valuables?
- Homeowners insurance may not cover all your valuables automatically.
- Speak to an agent to understand the limitations and exclusions in your home insurance policy.
- Additional home coverage may be needed to ensure the valuables within it are fully covered.
- Don't forget about liability insurance to protect your assets from potential law suits.
Q. I'm about to buy my first home and I am trying to figure out the right insurance coverage for this new phase of my life. There's one thing I'm still unclear about — I have a lot of jewelry and collectibles that were handed down from my grandparents. Are my valuables covered under a homeowners policy?
We posed this question to Douglas Bolerjack, a Farmers Insurance® agent based in Columbia, Missouri. Here's what he had to say about protecting your valuables with homeowners insurance.
A. Congratulations on purchasing your first home! The short answer to your question is yes, all your property can be covered under a homeowners policy. However, one of the biggest mistakes consumers can make is to assume all your valuables will be covered automatically. You may have to add some items separately to your policy. These items could include valuables like jewelry, a coin collection, fine furs and more.
"How can I make sure my valuables are covered?"
It all comes down to knowing the right questions to ask. When buying a homeowners policy, it's important to ask is about the limitations and exclusions. As an agent, when I am asked that question by a customer, I pull out the policy and go down the list, item by item. Because, while it's the homeowner's responsibility to read and understand your contract, that responsibility can be overwhelming — especially for new or first-time homeowners. That's why it's great to have an agent who can explain what each line in the policy actually means.
Let's talk about your jewelry, for example. There could be a limitation in your policy in terms of what is covered for loss by theft. If your house is robbed and your jewelry is stolen, for example, your policy may only cover the loss for up to $1500. But, what if your jewelry is worth more than that? This is a great example of how an agent can help you navigate the process of ensuring your specific valuables are covered. If I were your agent, I'd advise you to have your jewelry appraised for its full value and then we would add that total value to what we call a floater, or additional coverage above what the base policy covers. That way, you've insured your jewelry to its proper value in the event of loss, even in the cases of theft or mysterious disappearance.
"What is the difference between theft and mysterious disappearance?"
With theft, there is evidence that your valuables were stolen. Perhaps someone broke into your house, robbed your hotel room or held you up at gunpoint — each of these terrible scenarios would fall under theft. With mysterious disappearance, there isn't always evidence. Imagine you head out for a round of golf and, before teeing up, put your wedding ring in your pocket. At the end of the round, you head back to the clubhouse only to discover your ring was no longer there. It mysteriously disappeared. With the right coverage in your policy, your valuable would still be protected, even in this case.
"What's the biggest mistake people make when buying a homeowners policy?"
There are two common mistakes I see individuals make when it comes to home insurance:
- Going it alone. This is one area where it pays to have a professional guide you through the process. Don't try to do it all on your own. Find an agent and allow plenty of time to sit down and discuss exactly what the homeowners policy does for you.
- Overlooking liability coverage. Just as with your auto insurance policy, liability coverage in your homeowners policy exists to protect you and your assets when an injury or personal property damage occurs on your property. Even if you are off your property, your homeowners policy may still cover you in the event of a liability suit. Liability insurance is relatively inexpensive, so I recommend buying lots of it.
Buying your first home can be an exciting and scary time in your life. Understanding how your homeowners policy works and knowing your valuables are protected can help you sleep easier under your new roof.